The article entitled "It's Time to Split HR" published in the July/August issue of the Harvard Business Review magazine, written by the respected management consultant, popular speaker and author of several managerial best-sellers Ram Charan, achieved a very high response rate among readers from the ranks of HR professionals.
The very first sentence of the article calls for the abolition of HR department as we know it today. "I talk with CEOs across the globe who are disappointed in their HR people," says Charan, "they would like to be able to use their chief human resource officers (CHROs) the way they use their CFOs—as sounding boards and trusted partners." Then he adds that most HR Directors do not play a sufficiently active role in identifying the strengths and weaknesses of organizations, fail to properly connect employees and jobs, or to be advisers on the implementation of talent strategies.
Ram Charan considers most HR Directors remain only process-oriented and knowledgeable only in the issues of payroll, benefits and corporate culture. They are still unable to connect HR to the real world of an organization's business needs. They do not know how key decisions are made and do not understand why individuals, or whole parts of an organization, fail to meet performance goals. The few of who understand these principles have one thing in common. They came into HR from other areas, especially from sales, manufacturing or finance. These people inspired Ram Charan to "split HR."
Ram Charan proposes abolishing the position of HR Director (CHRO) and dividing the current HR department into two parts. The first one, he calls HR-A, is the administrative branch which should primarily include salaries and benefits and report to the CFO. The second part, called HR-LO (leadership and organization), should focus on improving the function of the human side of business and should report to the CEO. The HR-LO department should be headed by experienced professionals from operation or finance with strong skills in business and people management. After a few years, these people could advance to higher management positions in the organization.
What do you think about this proposal? We can tell you in advance that another world-renowned consultant and author of the concept of the HR business partnership, Dave Ulrich, disagrees with Ram Charan. You can read the Ulrich's reaction in another article later on this week.
-Kk-